1. GENERAL

a ) Letters seeking confirmation of balances have been sent to Customers and replies from the Customers are awaited and as such could not be reconciled.

b) The CEGAT issued orders duing the year 2001-02 setting aside the earlier ordes of the customs Department levying duty of Rs. 1132.81 lakhs on the accessories and spares of Dr- Aquarius. The Department while accepting CEGAT order sanctioned the refund of Rs.1132.81 lakhs under section 27 (2) of Customs Act 1962, but ordered to credit the same to consumer welfare Fund. Aggrieved by this order DCI filed an appeal before CESTAT, Kolkata for issuance of necessary directions to the Department for refunding the Customs Duty. Necessary adjustments to capital cost of the dredger will be made on receipt of the refund.

c ) The company filed an appeal and an application for stay before the customs, Excise and service Tax Appellate Tribunal against Commission rate's Orders confirming recovery of Rs.4127.51 lakhs towards irregular Cenvat credit availed during the period from june,2005 to March,2013 and imposing a penalty / interest of Rs. 3702.02 lakhs. No provision has been made as the matter is pending before the tribunal.

d) Escalation Claims (Labour / Material) have been brferred on the basis of latest available indices.

e) Income Tax appeals are pending for the Assessment years 2006-07 to 2012-13 before the Income Tax Authorities. The disputed tax under protest is Rs.134.28 lakhs (Net) has not been paid since the company has given a request for adjustment with the refunds.

f) During the year the Company received arbitration awards in its favour in respect of the following:

i) Disputes pertaining to capital dredging works in Paradeep Port and the net effect of the decision resulted in income of X566.55 lakhs.

ii) Disputes in the matter of capital dredging of flood channel (NDV) resulted in income of Rs.114.10 lakhs.

g) During the year, physical verification of inventory on board dredger have been carried out by the management and noticed surplus items of stock as compared to book value. Pending further analysis for quantifying the value of stock, the same have not been adjusted in the books of accounts.

k) Figures have been rounded off to decimals of lakh.

l) Figures for the brvious year have been re-grouped/re-classified wherever necessary to conform to current year  groupings.

NOTE XVII - ACCOUNTING POLICIES_

1. BASIS OF brPARATION OF FINANCIAL STATEMENTS.

a ) The Financial Statements have been brpared under the historical cost convention in accordance with the generally accepted accounting principles (IGAAP) under the historical cost convention on accrual basis. IGAAP comprises Accounting standards notified by the central Government of India, and the relevant provisions of Companies Act, 2013.The financial statements are brsented in Indian Rupees rounded off to the nearest lakh with two decimals.

2. OPERATIONAL INCOME:

a) Operational income is recognized as income depending upon nature of the contract as per respective applicable accounting standards.

b) Claims brferred on customers for works/items not contemplated are considered as in come on their acceptance.

3. OTHER INCOME:

a) Sale proceeds of condemned and unserviceable Spares, Stores, Empties, Waste Oil, etc are accounted for in the year of disposal.

b) Liquidated damages recovered from suppliers are accounted on settlement of bills.

c) Interests on Tax refunds are accounted on receipt basis.

d) In respect of hull and machinery insurance claims, the claim is accounted as claims recoverable from underwriters as and when the repair bill is submitted by yard/firm. Necessary adjustments are made as and when the claim is accepted by Underwriters. In respect of other insurance claims, the same are accounted for on realisation / settlement of the same by the underwriters".

4. OPERATIONAL EXPENSES:

a) All operational expenses are charged to revenue under accrual basis.

b) Insurance:

Final adjustments to insurance brmium paid are considered in accounts on the basis of demands received.

5. DEbrCIATION:

Debrciation is provided considering the useful lives as brscribed under Schedule II of the Companies Act, 2013, other than the following class of assets, whose useful lives are different from that of the lives brscribed in the Schedule, which are determined based on the technical evaluation.

i. Dredgers-

ii. The useful life dredgers will be 25 years.

iii. Expenditure incurred on drydocking of dredgers which have completed the useful life of 25 years already is capitalised to the said dredger and debrciated over the extended useful life determined by technical evaluation. Note:

Residual value of the dredgers will be considered at 2% of the original cost of the dredger including capitalisation of exchange variance in accordance with AS-11.

In respect of the following assets debrciation is provided on straight line method based on technical estimation of useful lives of such assets:

iv. Pipeline Equipment: 25% for Mild Steel pipe line equipment and 12.5% for high density polyethylene pipe line equipment.

v. Second hand assets: As per estimate of balance service life.

vi. Building on lease: Cost of building constructed on lease hold land is amortized over the lease period.

vii. Items of Fixed Assets whose cost does not exceed X5,000/- (Rupees five thousand) are capitalised and debrciated 100% during the year.

viii. Cost of Library: Cost of library is considered as Other establishment expenditure.

ix. The exchange differences on long term foreign currency monetary liabilities used for acquisition of specific fixed assets adjusted to the cost of fixed assets, are amortized over the remaining useful life of the said asset.

6. FIXED ASSETS:

a) Fixed Assets are stated at historical cost less debrciation (historical cost includes financing cost and other related overheads).

b) Grants in Aid relating to specific Fixed Assets are shown as deduction from the gross value of the assets concerned in arriving at book value.

c ) Items of the nature of Capital/ Equipments are capitalized and debrciated over the remaining useful life of the asset. d) The exchange differences on long term foreign currency liabilities used for acquisition of fixed assets are adjusted to the cost of the specific fixed assets.

7. BORROWING COSTS:

a ) As per the transitional provisions given in the notification issued by the Ministry of Corporate Affairs, Government of India dated 31st Mar, 2009 read with the notification dated 9th August,2012, the Company has opted for adjusting the

exchange difference on the long term foreign currency monetary items to the cost of the assets acquired out of these foreign currency items.

b) Borrowing costs attributable to acquisition, construction or production of qualifying assets are capitalised as part of the cost of that asset, till the time the asset is put to use. Other borrowing costs are recognised as an expense in the period in which they are incurred.

8. FOREIGN CURRENCY TRANSACTIONS:

Transactions in foreign currency are recorded at exchange rates brvailing at the dates of the transactions. As per the notification issued by the Ministry of Corporate Affairs dated 31st Mar, 2009, the Company has opted for adjusting the exchange difference on the long term foreign currency monetary items to the cost of the assets acquired out of these foreign currency items. The Company has accordingly aligned its accounting policy based on the above notification.

Exchange differences arising out of fluctuation in exchange rates on settlement/restatement at the period end are accounted based on the nature of transaction as under:

i) Short term foreign currency monetary assets and liabilities: recognized in the profit and loss account.

ii) Long term foreign currency monetary liabilities used for acquisition of fixed assets: adjusted to the

cost of the fixed assets and amortized over the remaining useful life of the asset.

9. INVENTORIES:

a) Stock of spares and stores is valued at weighted average cost and is inclusive of :

(i) Customs duty, if any as applicable to the whole consignment and

(ii) Overheads at brdetermined rate.

b) Reconditioned spares are valued at the respective cost of reconditioning.

c ) Spares /stores are accounted for as per respective delivery/ shipment terms as material-in transit/ stock accounts, valued as per (a) above and are charged to revenue as and when consumed. d) Stores and lubricants delivered to crafts during the year are charged to revenue.

10. INVESTMENTS:

a) Long Term Investments are stated at cost. Provision for diminution is made to recognize a decline, other than temporary, in the value of such investments.

b) Current Investments are stated at lower of cost and fair value.

11. EMPLOYEE BENEFITS:

Provisions for Gratuity Liability and leave encashment liability are made on the basis of actuarial Valuation using the projected unit credit method. In the case of crew and MPW of floating employees who are entitled to settlement of leave in full on signing off, provision is made for the leave at credit of such employees as on 31st March. Actuarial liability in excess of respective plan assets is recognized during the year.

Provision for Gratuity as per the Actuarial valuation is funded with a separate Trust.

12. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognized when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognized nor disclosed in the financial statements. Contingent liabilities, if material, are disclosed by way of notes.

For and on behalf of Board of Directors

-sd- (RAJESH TRIPATHI) Chairman and Managing Director and CEO

-sd- (K.ASWINI SREEKANTH) Company Secretary

-sd- (S.CHARLES) Director (Finance) & CFO

As per our Report of even date

For Tukaram & Co

Chartered Accountants

Firm Regn No. 004436S

-sd- (P.MURALI)

Partner

Membership No. 221625

PLACE : NEW DELHI,

DATED : 26-05-2015